News

Lord Howell of Guildford on fracking

He opens by saying that he had recently attended two key meetings, that between them “gathered just about all the expertise in the planet on shale oil and gas and fracking issues.”

And then he summarises the current situation, and lessons learned from the USA, before drawing five conclusions for fracking in the UK.

I’ve summarised his points below, though to be honest his piece is very short and you would likely be better off reading the whole thing here.

And what I think this means for us in Ryedale is:

Ryedale must be very close to the top of the target list for fracking, since our population density is so low.

They know fracking damages the water supply, and has other ‘environmental’ impacts, but they want to go ahead anyway.

Fracking in the UK is currently only borderline achievable, physically, financially, and politically.

They believe (or Lord Howell believes) that people have the potential to stop fracking in its tracks, physically, and economically, and politically.

Remember also that since this article/viewpoint was published,

i) Rather than trying to negotiate, the government has chosen the path of confrontation, seeking to impose fracking via the so called ‘Infrastructure Bill’, currently before the House of Lords.

ii) Third Energy has made planning applications to NYCC to put in place some of the critical infrastructure without which it would not be able to frack.

Current Situation:

Lord Howell makes a number of key points, so succinctly as to make it barely possible to summarise them. You can read them in full here.

He says:

Large scale fracking in the USA “only came with the passing of the Act in 2005 which exempted licencees from the U.S. Clean Water Act”

The current low price of natural gas “means that most of the drilling enterprises in America are losing money”

Fracking requires infrastructure, a lot of it: “drilling rigs and machinery …massive gas grid to get the stuff into the main trunk gas pipelines, and lots of open-road heavy transport facilities. The UK lacks these so far.

“America, almost uniquely, also has a system of subterranean rights and royalties accruing to the property owner… Where these incentives do not operate the Americans argue that it is a waste of time and money trying to engage with and bribe rural communities that do not want it. They urge only going, to start with, to areas where local people WANT fracking, well away from all communities and ideally in derelict or wasteland areas with no nature or environmental significance.”

“The expert consensus… warns that in the UK … it could all take longer to get going than some have implied, despite the promising gas formations and geology. And it will be a struggle to keep costs down to commercial rates. Any drop in the OIL price below $80 (which incidentally quite a few experts predict) could make new shale operations here, or elsewhere, uneconomic”

In other words (my words):

Fracking pollutes the water supply and they know it.

Fracking is currently uneconomic / borderline uneconomic, depending on the market prices of oil and gas. (And remember the price of oil has fallen significantly since May.)

Fracking requires lots of infrastructure, which we do not readily have in the UK.

Fracking can be resisted by communities that do not want it and it is “a waste of time and money trying to bribe rural communities that do not want it.”
(So currently they are trying the route of imposing fracking instead of bribery.)

Specifically, he says that the “system of subterranean rights and royalties accruing to the property owner” is essential to the success of fracking and is not in place in the UK. The Infrastructure Bill currently facing Parliament is attempting to override the rights we currently have, but is not attempting to replace them with the royalty payments that come to property owners in the USA. (Remember, the wording proposed here in the UK is “payments at the discretion of the fracking company”, which puts fracking on a shaky foundation.)

Implications for Fracking in the UK:

He then draws five conclusions for fracking in the UK, which he “dearly wants to see economically viable shale gas and oil production go ahead as soon as possible in Britain.” (Notice that he hedges his statement with the words, “economically viable”.)

“The view coming out from Ministers is MUCH too optimistic and could prove extremely dangerously politically when the reality unfolds. The American experience, which was anyway full of problems and delays before it finally took off, cannot be repeated in the totally different conditions here.”

“Huge extra infrastructure spending is needed in the UK to make it all work on any significant scale – and lots of highly controversial legislation to be passed. Thousands of rigs will [would] be needed and America has those thousands. We have, as yet, only a handful.”

“Spending time and money trying to bribe and cajole rural communities is a complete waste, as well as putting backs up and losing rural votes on a major scale. Villages and their environs where homes are worth a million will be unimpressed by £100k offers.”

“This is… an argument against starting in the wrong places and with misleading statements about timing and effect. Trying to start in Southern England, and in the Home counties, or in rural and countryside areas anywhere, north or south, is a guarantee of longer delays, higher costs and increased hostility from both green left and countryside right. Every time Ministers open their mouths to claim that fracking must start everywhere around Britain, and not just in carefully selected and remote (derelict) areas, they lose thousands of Tory votes. In the north east, the north west and all the places where the Industrial revolution has left the worst historical scars they do have just such areas, they have the gas and they have the local wish to see fracking investment – to upgrade old coal mining areas, for example.”

“The claims that off-shore coal gasification may well be cheaper than on-shore fracking, and certainly far less controversial environmentally, should be carefully examined.”

Summarising again:

He is aware of the political danger.

He knows that the value of £1m homes would fall by more than £100k, and that votes would be lost.

He knows the lack of existing infrastructure currently makes fracking impracticable. (The planning applications currently under way at Ebberston Moor are about putting the infrastructure in place.)